Correlation Between Aberdeen New and INVESCO MARKETS
Can any of the company-specific risk be diversified away by investing in both Aberdeen New and INVESCO MARKETS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aberdeen New and INVESCO MARKETS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen New India and INVESCO MARKETS II, you can compare the effects of market volatilities on Aberdeen New and INVESCO MARKETS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aberdeen New with a short position of INVESCO MARKETS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen New and INVESCO MARKETS.
Diversification Opportunities for Aberdeen New and INVESCO MARKETS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aberdeen and INVESCO is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen New India and INVESCO MARKETS II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVESCO MARKETS II and Aberdeen New is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aberdeen New India are associated (or correlated) with INVESCO MARKETS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVESCO MARKETS II has no effect on the direction of Aberdeen New i.e., Aberdeen New and INVESCO MARKETS go up and down completely randomly.
Pair Corralation between Aberdeen New and INVESCO MARKETS
Assuming the 90 days trading horizon Aberdeen New India is expected to generate 1.35 times more return on investment than INVESCO MARKETS. However, Aberdeen New is 1.35 times more volatile than INVESCO MARKETS II. It trades about 0.36 of its potential returns per unit of risk. INVESCO MARKETS II is currently generating about 0.31 per unit of risk. If you would invest 74,800 in Aberdeen New India on August 30, 2024 and sell it today you would earn a total of 6,400 from holding Aberdeen New India or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aberdeen New India vs. INVESCO MARKETS II
Performance |
| Timeline |
| Aberdeen New India |
| INVESCO MARKETS II |
Aberdeen New and INVESCO MARKETS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen New and INVESCO MARKETS
The main advantage of trading using opposite Aberdeen New and INVESCO MARKETS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen New position performs unexpectedly, INVESCO MARKETS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in INVESCO MARKETS will offset losses from the drop in INVESCO MARKETS's long position.| Aberdeen New vs. Downing Strategic Micro Cap | Aberdeen New vs. CT Private Equity | Aberdeen New vs. Baillie Gifford Growth | Aberdeen New vs. Blackrock Energy and |
| INVESCO MARKETS vs. INVESCO MARKETS II | INVESCO MARKETS vs. INVESCO MARKETS II | INVESCO MARKETS vs. INVESCO MARKETS II | INVESCO MARKETS vs. INVESCO MARKETS II |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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